ICO Analysis: Paragon

ICO Analysis: Paragon

Introduction

P. H. Madore

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link

There have been some issues surrounding this author and the Paragon ICO, so we must be up front about that. The author wrote an article questioning what was going on with Paragon, and they did not take kindly to it. That they went straight to legal threats in dealing with the press is something investors should take note of – depending on your take, it’s either bad business or just distasteful. Moving on, let’s figure out what Paragon actually is before passing any final judgments. We must stress that there are no circumstances where the author himself would invest in this ICO, but this does not prohibit him from seeing what it is all about and reporting back.

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New research shows powerful health benefits of cannabis and strong social marijuanavements are pushing for increased legalization. One way to improve the reputation of the industry is to modernize it, make it standardized, fully verifiable, and built on a system of trust between patients, doctors, growers, and suppliers.

They then spend a few minutes establishing the legitimacy of demand for legalized marijuana. After that, we arrive here:

We started Paragon to resolve many issues currently faced by the cannabis indus-try. Blockchain-built smart contract technology is ideally suited to organize, system-atize, and bring verification and stability to a traditionally unchecked industry. Even before full legalization there are many opportunities for blockchain and crypto-to-kens to enhance the cannabis community and business model.

This might seem just overzealous on the surface, but in fact, it’s arguable at best. In fact, there are plenty of tools already made available to marijuana and any other business owner, tools which will not necessarily need tailoring to the marijuana industry. After all, that’s the ideal: that marijuana is simply brought into the fold of regular business. As such, Aragon would have no issue servicing their needs. Further, dispensaries who were of a mind could issue their own smart contracts to growers and buyers who were of a mind to participate in something like that. If Paragon makes this easy, there will likely be a place for it. But let’s not kid ourselves into thinking that Paragon is some sudden marriage of crypto and marijuana. It’s anything but – CCN, our sister site, has been covering this aspect of cryptocurrency’s actual potential for years.

Indeed, Bitcoin itself rose in value thanks to the illegality of drugs, and Monero is currently doing the same, although long-term both turn out to offer far more than just the ability to safely transact online.

If you ask this author, these aims are mostly out of touch. First, an immutable ledger for this industry would be better if it were more opaque, permissioned to the parties that needed the information and none others. Establishing “nich co-working spaces” is probably ill-fated. Organizing and uniting global legalization efforts is not the pursuit of profit. You actually don’t have the right to not be pursuing profit if you’re asking people to invest in you, but let’s leave that bit aside, because there is one thing that can make some positive impact, and that is their second point.

If you can go to legal cannabis businesses in California and Colorado and other states and tell them that they can simply give you cash and that you will give them an in-kind amount of digital tokens that they can then sell for money which they can transfer to their bank accounts or Paypal accounts, or work on this aspect of their business, helping to lessen the massive need they’ve currently developed for security and cash storage, then you can make a lot of money. Whoever helps them first will make a lot of money, be it banks, Bitcoin companies, or start-ups like ParagonCoin. Potcoin was designed for the purpose of helping the cannabis industry in spirit, after all, but as Paragon seems to be aware: it’s going to take a real effort to build the tools necessary, not just the release of another chain. And while the Potcoin token continues to be worth a moderate amount on the market, the cannabis industry continues to have cash and transactional problems.

Thus far, the only real offering we’re seeing in Paragon is that they want to make Paragon Coin a way to make payments within the industry. If such a thing is given life, then whoever holds the token, if it is done correctly, will be able to sell it for more than they paid for it. We need to look over a few more details before we get moving on.

The Paragon model starts with a crypto-token and blockchain technology. It then sets up a network of physical cooperative workspaces where members can work, meet, socialize, and create. This will resolve issues with leases for cannabis-based startups and dispensaries that struggle with finding affordable and suitable locations to house their business.

Again, we don’t view this as a sufficient enough problem. We think if you’re going to make a token for the cannabis industry, then one that enables them to get their money safely into digital form is what you need to build. The current situation for the marijuana industry is archaic to say the least.

While this is what Paragon offers, and even a plan to implement the token, they’re really just one more option among many. There’s no need to assume, then, that they will be the solution, or that dispensaries would not simply opt to issue their own tokens through some other means – Aragon or Bancor, or just an ERC20 token of their own, once they had the idea. We’re not sure there would be significant benefit to the participating dispensaries in the first place.

Nevertheless, we think that enough participants will emerge. We think the token will find a home in a limited number of dispensaries, maybe a good number. As such, we can trust that it will have some demand.

Paragon Coin

There will be 200 million Paragon coins issued. They describe a structure of bonuses and sales:

100,000,000 tokens for sale valued at $1.00 USD each at stage 1

50,000,000 tokens for sale at stage 2 – no sooner than 2021, at market price (not the initial $1 of the first crowdsale )

40,000,000 tokens allotted for Paragon controlled reserve to maintain price support of the PRG tokens. Tokens can be bought or sold to keep the tokens circulation stable

10,000,000 tokens community-controlled reserve to be used for the best startup ideas as voted on by the community

Again, big surprise: something not to like. Not just a 25% rake back, but 10 million to be controlled by the “community.” If this feels like malarkey, it’s probably because it must be.

Paragon Team

The CEO is a beauty queen who appears in the following video, which she pointedly defended in an e-mail wherein she simultaneously threatened this author’s news outfit with a lawsuit. All we have to say is that in the world of business, respect is everything, and it could be harder for the CEO of Paragon to garner it than others, based on this kind of thing. This is all we’re getting at.

While we feel that the team can probably deliver on the promise of a token, and perhaps there’s some value added through the additional building of “co-working spaces,” we still think that overall it doesn’t matter – there’s not enough to like about the project as a whole to really worry too much more about the team.

The Verdict

In terms of profitability, you can probably buy this hype and sell the news later. Quickly, now. We’re not over-rating it, just saying there are probably short-term profits to be made, but we think long-term that much better solutions will emerge either from within the cannabis industry or simply from a much more competent group.

Risk

Huge risk of a lack of adoption here. -4

Lots of “community-based,” which is to say not money-making, ideas. -1

Questionable people on staff, not too important though. -1

Growth Potential

We think if they can successfully deliver a product which allows the cannabis industry to get its money into digital form with ease, they can probably find a niche and make a good amount of money. As such, we lend 5 points.

Wherever this project finds its start, it will need to be a valuable proposition for the industry to actually get on board. It may require getting the whole industry on board, but we think that would actually raise the value of the token. Thus, if any effort is put into implementation, it could lead to a much more valuable token just by virtue of what it takes to makes such an implementation work. +3

Being early in terms of ICOs that aim to help the marijuana industry will establish the interest of the market in as much. +2

We understand that according to them much of the negativity directed at Paragon is part of a campaign of negativity by extortionists. In the event that the author has been overly negative, we lend .75 points.

Disposition

We arrive at a 4.75 for Paragon. We think there’s short-term profit to be had, probably, based on the hype surrounding the thing.

Investment Details

The official crowdsale begins on September 15th, but you can get in on the presale now if you like. Visit https://paragoncoin.com/en and, as always, be careful. See above for the pricing structure again.

P. H. Madore

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link

Posted on 2:59 pm September 2, 2017.

Posted on 5:04 pm September 2, 2017.

Excellent analysis, but I think this one line from their website truly sums things up: their multi-million dollar ICO needs to address the fact that at their coworking spaces (read, idea from 2015) there will be a “Cafe/snacks menu and simple checkout process with PRG”.

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